Page 66 - Transformation Report

As previously indicated, the full impact of
Table 22 Nelson Mandela University Financial Indicators (2016- 2020)
the COVID-19 pandemic is yet to be seen.
The near doubling of the student debt
ratio in 2020 should be flagged. However,
it is not an unusual observation for 2020
within the broader higher education
sector. With the poor state of the economy,
increased unemployment rates and job
losses associated with the pandemic, the
ability of students to service their debts
have become more constrained. Should
this indicator continue to increase, then
mechanisms should be put in place to
mitigate the risk of non-payment of fees,
through reviewing debt concessions,
mobilising funding for the “missing
middle”, reviewing provisions for student
debt write-offs, and mobilising third
stream revenue to become less reliant on
first and second stream revenue being
subsidy and fees.

Despite the short-term liquidity ratio
decreasing over the period under
review, the 2020 ratio of 6.90 is triple the
minimum norm of 2.1. The sustainability
ratio (calculated on Council-controlled
reserves only) was at 0.62 in 2018 and
reduced to 0.55 in 2020. This means that
our University reserves in 2020 can cover
55 percent of the annual recurrent Council-controlled expenditure. Council has set an indicator of 100 percent, which the
University will set as its target. When total reserves are expressed over total expenditure, the University has a ratio of 161
percent in 2020, although total reserves include encumbered funds not under the control of the Council. Post-retirement
liabilities have reduced relative to the sum of R68 million in 2018 to R62million in 2020. It is expected that this liability will
reduce with time mostly owing to employees passing away.

4. Strategic Resource Mobilisation and Advancement

The four key strategic pillars that inform the University’s Resource Mobilisation Strategy are reflected in the infographic below:

In addition to the above, alternative options for resource Number: 2016/293522/07), a private company wholly owned
mobilisation continue to be explored. The development by the Nelson Mandela University Trust. It was established
of the Resource Mobilisation Strategy by the Strategic in 2017 to undertake certain strategic commercialisation
Resource Mobilisation and Advancement Office outlines projects designed to improve the financial sustainability
the expansion of resource mobilisation avenues. Another of the University into the future. The Company operates in
initiative involves the establishment of the Nelson Mandela terms of its Memorandum of Incorporation and Shareholders
University Investment Company (Pty) Limited (Registration Compact. The Company was formed, inter alia, to initiate

2018-2020 66